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The love affair Canadians have with debt is still going strong, according to a new report by credit monitoring agency Equifax Canada.

Equifax said that its figures show that consumer debt, excluding mortgages, rose to $518.3 billion through the end of November 2013. That was up 4.2 per cent from $497.4 billion a year earlier.

Despite the increase in debt, however, the overall delinquency rate — bills due past 90 days — declined to a record low of 1.12 per cent from 1.19 per cent in the same period of 2012.

“The real pattern that we’ve been observing is that Canadians are taking on more debt, but they can handle it well and are making those monthly payments,” said Regina Malina, director of analytics for Equifax.

Meanwhile, overall consumer debt, including mortgages, also continues to rise — up 9.1 per cent to $1.422 trillion from $1.303 trillion a year earlier.

Malina says the data shows that Canadians are willing to take on more debt — from car loans to credit card purchases — but are more aware of how important it is to keep their debt levels under control.

High debt levels are not a big concern in current conditions, which signal a stabilizing economy, improvement in the unemployment rate and an anticipated gradual increase in interest rates.

But Malina says if any or all of these conditions change, Canadians should reconsider how much debt they are piling on.

“That is the reason why we should remain vigilant,” she said. “It’s easy to get complacent. Even if the debt is up, and the delinquency is going down, it is no cause for alarm but as I said, we have to watch out for these other economic factors.”

Equifax uses data from 25 million files on consumer credit history, including national credit cards, loans and mortgages in compiling the report each quarter.

Royal Bank of Canada, the country’s largest mortgage lender, has quietly cut some of its mortgage rates this weekend. The move appears to be part of a broader dip in rates, although economists generally still expect an increase in 2014.

Five-year fixed mortgage rates rose industry-wide for much of 2013, from their low of 2.64 per cent in April to their high of 3.39 per cent in September, according to Alyssa Richard, the chief executive officer of RateHub.ca. They edged down a bit later in the fall but had generally been steady at around 3.25 per cent since then.

Royal Bank of Canada, the country’s largest mortgage lender, has quietly cut some of its mortgage rates this weekend. The move appears to be part of a broader dip in rates, although economists generally still expect an increase in 2014.

RBC is now cutting its two-, three-, four– and five-year fixed mortgage rates each by 10 basis points. In an emailed statement, the bank said that some mortgage lenders have recently been pricing at lower rates, prompting it to move.

Royal Bank is often a price leader when it comes to mortgages, and other big banks frequently follow suit after it changes its prices. Its five-year fixed mortgage rate is now 3.69 per cent.

Mortgage prices tend to follow changes in five-year government bond yields because of the impact that those yields have on banks’ funding costs. The yield on five-year government of Canada bonds has fallen from 1.95 per cent on December 31st to 1.71 per cent on January 16th, according to Bank of Canada data, although it fluctuated during that time.

Canadian bond yields tend to follow U.S. bond yields. Yields began rising last May after U.S. employment numbers came in much better than expected, raising hopes for the U.S. economy. Then they shot up further after U.S. Federal Reserve chairman Ben Bernanke suggested the central bank could start tapering its asset-buying program, a signal that he thought the economy’s health was improving.

While the U.S. central bank has begun tapering, December jobs numbers and some other recent data have been disappointing, and caused bond yields to fall.

Most economists still expect that both yields and mortgage rates will tick up gradually through 2014, as the U.S. economy improves and the central bank continues to back off of its asset-buying program, known as quantitative easing.

But as Ms. Richard points out, it is possible that the U.S. economy will prove to be weaker than expected, and that could result in further decreases in bond yields and mortgage rates.

Royal Bank of Canada, which normally issues a press release when it changes its mortgage rates, made this move quietly, simply posting the new rates on its site. The news was reported this weekend by the blog Canadian Mortgage Trends.

Bank of Montreal dropped its five-year rate to 2.99 per cent early last year, spurring a price battle that angered Finance Minister Jim Flaherty. Mr. Flaherty has taken numerous steps, such as tightening the mortgage insurance rules, to prevent consumers from taking on too much mortgage debt. Policy-makers have been trying to warn consumers that, at some point, rates will rise.

This New Year as you make your resolutions, commit to making one that will get you healthy and fit — financially. While setting personal resolutions have become second nature, the New Year should also be the time each of us sits down with family, especially your significant other, adult children and older relatives, and finally get talking about where you stand financially. Talk about what your financial goals are in 2014 and what you need to have in place to ensure that your family is protected and aware.

When coaching my clients I am often asked what type of financial resolutions I think they should make for themselves or their families. Here are six suggestions I offer to help get you started for 2014.

Do not put off the topic of estate planning and final wishes for another year. Set aside time to sit down and have an open and honest conversations with your family about your final wishes. Funeral planning is hard enough, but doing so in the midst of an unexpected loss is overwhelming and unfair to grieving family members.

Make sure you have the right amount of life insurance in place. Your needs and net worth change year to year. Is that policy you and your partner placed on yourselves years ago still enough to protect your family in the case of an untimely passing? Do you have the right type of insurance? Will it take care of your final expenses, provide an income stream to replace your earnings and cover any capital gains?

Where there is a Will, there is Peace of Mind. Do you have a properly drafted will in place? Is there anything you need to revise or add? The majority of Canadians (56 per cent, according to a survey released by LawPRO) do not have a signed will. If you are one of the fortunate 44 per cent, when was the last time you reviewed it?

Do you have a legal guardian appointed for your children? If something should happen to you and your spouse have you formally asked someone to take on the role of legal guardian and have they agreed to care for your children, and respect your wishes in terms of education and religious upbringing for example?

Become knowledgeable about your financial situation. At the end of the day, it is up to all of us to know and understand our financial picture. Book an appointment with your Financial Advisor and Accountant to review your investments and your record keeping needs for the upcoming year. Know what you have, how much you have, how it is being taxed and if it is properly protected.

Are you a business owner? If so, do you have your business affairs in order? There are plans and safeguards you can put in place to keep your business running in the event of an unforeseen illness, disability or death.

Starting in 2014 and every New Year thereafter, I really hope to hear that more people are getting into the habit of scheduling time to review their family’s financial well-being. “We have an obligation to ourselves and to those we love to make sure that we leave this world in an organized manner”.

1. Clip coupons: I know it’s what your mom used to do, but mother knows best! Using coupons, especially on already sale-priced items, will give you maximum savings on household goods. My best advice is clip coupons for products you already use in your home and then scan the fliers to see when they go on sale and stock up!

2. Take your lunch to work: Most people know a home packed lunch is cheaper but have you ever crunched the numbers? Lets take the example of a lunch consisting of a sandwich and a bottle of water. If the average cost is $7.00, over 4 weeks that equals $140.00. But taking a sandwich from home, your grocery costs is about $41.00*, a savings of $99 every 4 weeks and almost $1300 every year!

3. Walk and bike: If you can walk to buy milk or bike to your local restaurant, do it. Its 100% free and you will get some exercise too! Of course you need to own a bike, a good bike cost $300 and can pay for itself in just one summer season.

4. Be careful when buying items on sale: This goes specifically for clothing and shoes. Here’s the test, go to your closet right now and look at all the clothes you bought on sale that you don’t wear and add up the cost. You’ll see how this quickly adds up to hundreds of dollars spent. I’m a big believer in buying clothing at full price if you know you will use it vs buying a bunch of things on sale and have them hang in your closet.

5. Don’t assume buying in bulk saves money: Always check the unit price of what you’re buying: toilet paper, aluminum foil, juice etc. Sometimes the smaller sized items can be cheaper per unit. Its easy math and usually the smaller sizes are sitting right beside the bulk size on the store shelves.

6. Check the portion sizes at a restaurant: Mains often come with to much rice, potatoes and salad. Ask the waiter if you and your dining buddy can share a main and order an extra steak or burger on its own.

7. Take advantage of social buying sites: Sign up for deals on group saving websites like Groupon, Living Social and WagJag. These smart sites send you deals based on your location. The best deals are on salon treatments, restaurants visits and clothing stores. A little travel tip, switch your location to the city you are traveling to and collect deals ahead of time.

8. Don’t pay bank fees: If your bank is charging you monthly fees to keep your money then you need to tell them to sign you up to a no-fee account or switch to a bank that will give you free banking. Don’t let the bank tell you that it costs them money to keep your money.

9. Buy smaller fruits and vegetables. If you are paying for fruits and veggies per pound buy smaller, apples, oranges, zucchinis mushrooms etc. This will avoid wasting fruits and vegetables. How often have you wasted half an apple because it was too big to finish? When you throw out half an apple you are throwing out money!

10. Dine out on weekdays: This might be the hardest sell, but eating out during the week can cost you less and makes more sense. Most restaurants have great deals during the week to attract customers and you will appreciate not having to cook and do dishes on a work night. But remember it’s cheaper to eat at home, so don’t over do this one.

Purchases at stores and websites fell 2.9 percent to $57.4 billion during the four days beginning with the Nov. 28 Thanksgiving holiday, according to a survey commissioned by the National Retail Federation. While 141 million people shopped, about 2 million more than last year, the average consumer’s spending dropped 3.9 percent to $407.02, the survey showed.

While the NRF reiterated its forecast this week that total sales in November and December would increase 3.9 percent, the trade group has said it would revise the forecast if necessary later this month.

“Retailers didn’t get what they wanted from Black Friday and they will need to make it up in the next three weeks,” Poonam Goyal, an analyst for Bloomberg Industries, said in an interview. “There will be some panic sales.”

“Consumers are generally not in a great mood, feeling very uneasy about the economy and their jobs, and are looking for value this year,” Stephen Stanley, chief economist at Pierpont Securities LLC in Stamford, Connecticut, wrote today in a note to clients. “They have their list and will check it twice, but they are not going to the mall and grabbing a bunch of random stuff because it is on sale or looks nice.”

This kind of so-called mission shopping, where a consumer buys one bargain-priced item and then leaves, will hurt profit margins, Goyal said. It may also explain why the number of shoppers increased and their spending fell, she said.

“That’s really bad for retailers,” Goyal said. Historically, Black Friday deals used to be the best of the year. Now that there are only a few items like that, consumers “are buying those and walking out the door.”

In one of the other early reads on results, sales at brick-and-mortar stores on Thanksgiving and Black Friday posted an estimated 2.3 percent gain to $12.3 billion, according to a report from ShopperTrak, the Chicago-based research company. The results were in line with ShopperTrak’s prediction for holiday purchases to gain 2.4 percent, the weakest since 2009.

The continued rise of e-commerce also may have kept some shoppers at home. Total e-commerce sales reached $20.6 billion in the first 29 days of this holiday season, ComScore Inc. said . That’s about 3.1 percent more than the period from Nov. 1 to Black Friday last year, the research firm’s data showed. The 2013 numbers include a few more shopping days because Thanksgiving fell on a later date this year.

Amazon.com Inc. (AMZN) was the most-visited online retailer on Black Friday from home and work desktop computers, followed by EBay Inc. (EBAY) and Wal-Mart’s site, ComScore said.

Target said it had twice as many online orders early on Thanksgiving morning as a year ago. Amazon.com lured shoppers by offering discounts as often as every 10 minutes during the holiday week.

When my husband and I opened a registered education savings plan (RESP) account for our first son, it seemed straightforward.

When we were able to, we deposited money into the account. We understood the basics – that we could make as much as $2,500 in RESP contributions a year and receive a matching 20-per-cent grant from the federal government. We’re talking $500 a year in free money.

When our second son arrived, we switched to a family RESP plan, where multiple children in a family are named as beneficiaries. The advantage of a family plan, we thought, is that if one of our sons doesn’t end up going to university or college, his brother can use the money in the family plan.

What seemed like a no-brainer got complicated – fast. Every time we deposited money into our family RESP, there was confusion from our financial institution’s end on how to do this. Because we have a family plan, we did not think we had to designate any of the money we deposited toward a specific son – which we later found out was necessary.

Two years later, I have been told that unbeknownst to us, all of the money we have deposited in the last two years has arbitrarily been put in my younger son’s name, leaving my older son with very little. I now have to meet with my financial institution to try to sort out the mess.

Confusion about how RESPs work is one reason why more people don’t have them, says Mike Holman, the author of The RESP Book and the Money Smarts blog. A lack of funds, he says, is another.

“RESPs are more complicated than RRSPs and TFSAs and they are harder to understand,” he says. “They have been around since 1998, but have taken some time to gain traction.”

The main advantage of family versus individual RESP is to save on annual fees and avoid duplication in paperwork, Mr. Holman says. However, it is possible to share money between siblings who have individual accounts, so you don’t actually need a family plan in order to do that.

As we have discovered, parents with family accounts do need to designate which child the money goes towards, because the government has to track contributions and withdrawals for each child in order to ensure they get the proper grant amount and the correct tax receipts.

“It is easier to think that a family account is just one big container and it all gets mixed together, but that is not the case,” Mr. Holman says. Most financial institutions have a default where they will divide the contributions equally between the children. You have the option to allocate every contribution to any one beneficiary or combination of beneficiaries.

Despite all the hassles that accompany RESPS, Mr. Holman maintains that for parents who can afford it, they are they best way to save money for a child’s education. He gave us this eight-step process on how to go about setting up an RESP account:

Step 1: Make sure the child is eligible for RESP grants. To be eligible, your child must be a Canadian resident. Also, the account should be started before the end of the year in which the child turns 15 years of age. The eligibility requirements for 16- and 17-year-olds is complicated.

Step 2: Make sure your finances are not a disaster. There is no point in saving for your child’s college education if you can’t afford to feed or clothe them. If you run into financial trouble and have to unwind RESP account early, there are big penalties.

Step 3: Decide between pooled/group/scholarship RESP plans or a self-directed RESP plan. Pooled RESP plans – where a salesperson will come to your house and help you fill out the forms, and the investments are managed for you – are more restrictive and have limitations around the contribution and withdrawal schedules. Self-directed plans – available from a financial adviser or bank – are a lot more flexible. As the “self-directed” name suggests, the parent controls the investment choices but the bank or financial adviser will weigh in on how to set up the investments.

Step 4 – Get your child a social insurance number (SIN).

Step 5 – Should you go with a family or an individual plan? An individual RESP plan has one beneficiary while a family plan can have multiple beneficiaries. If you have one child, then an individual plan is the obvious choice. For multiple-child families, the family plan is often more convenient and sometimes cheaper. However there are drawbacks to family plans as well: It’s difficult to keep track of contributions by beneficiary and the withdrawal scenarios are more complicated.

Step 6 – Set up the RESP account. This can be done through your financial adviser, a discount brokerage account, or your local bank. When you fill out the paperwork for the account, it is important to apply for ALL the different grants, including the lower-income ones. Even if you don’t qualify for all the grants now, it’s possible that you will have some lower-income years in the future and those grants will be paid automatically if you have applied in the past.

Step 7 – Calculate how much you can contribute. To get the maximum annual grant per child, you should contribute $2,500 a year or $208.33 each month. This can be doubled if you have unused contribution room. Most people with young kids might be better off starting with a smaller monthly amount, say $50 and increasing it with time. Every little bit counts, especially if you start early.

Step 8 – Start contributing. Normally you would start the RESP account with an initial contribution, but some institutions will allow you to set up a monthly preauthorized transfer in lieu of an initial deposit. At this point you don’t have to do anything, except continue with your contributions.

Managing your own money can be challenging enough. But incorporating your spouse’s finances can be overwhelming. In other words, don’t expect to be an expert right away. The two of you have some things to work out and should take plenty of time to do so.

Follow these nine steps one step at a time so you and your spouse can easily get accustomed to healthy financial habits.

1. Start Talking About Finances

It’s best to do this before you get married, but if you have not, discuss finances with your new spouse as soon as possible. You’ll need to go over what accounts you have and how much debt you carry. You’ll also want to be clear on how you expect money to be handled.

For example, let your spouse know if you expect him or her to discuss purchases over $100 with you first. Make sure each person has a good understanding of where you stand financially as a couple and the expectations that the other holds.

2. Write Down Goals

After you have determined your baseline financial status, discuss your long-term financial goals in-depth. For example, do you plan to retire at a certain age? Do you want to get out of debt and become a millionaire?

Make sure to write all of your goals down and review them periodically. You’ll have a much better chance at success if you do.

3. Discuss Bank Accounts’

There are both pros and cons to opening a joint bank account or to maintaining your individual accounts after you’re married. You can even do both. Combining accounts can simplify your finances and may help breed trust in a marriage. Moreover, it may be especially valuable when one spouse chooses to take on more household or child-rearing duties than the other and as a result there is inequality in income.

That said, some level of independence may be preferable to you both, though it can also make it easy for you or your spouse to hide certain purchases or spending habits. Plus, given the high divorce rate, keeping separate bank accounts can provide you some measure of protection should your spouse decide to “take the money and run.” Discuss this at length with your spouse to make sure you’re both comfortable with whatever you decide.

4. Build an Emergency Fund

If you don’t already have an emergency fund, consider making this a top priority.

An emergency fund is money that is set aside in case something expensive happens unexpectedly, such as a lost job, family illness, natural disaster, or a major home repair. Aim to save about 6 months’ worth of your household expenses in case the emergency is that you have no income. Building an emergency fund should be a priority because it will bring financial security and protect your relationship in case disaster strikes.

5. Design a Budget

Start by reviewing your joint expenses over the last few months to determine how much you’ve been spending and if you need to bring that amount down. Then, establish dollar limits per category that you create according to your after-tax income. Don’t forget to allocate for unexpected or irregular expenses, such as routine car maintenance or doctor’s appointments. Your budget may be a work in progress, so don’t worry if you have to make adjustments, especially over the first few months.

6. Track Your Budget

It’s not enough to just make a budget. You need to make sure you stay within your spending allotment and adjust accordingly as your situation, expenses, or income changes. One very effective way to stick to your budget is to use the envelope budgeting system. This is perfect for young couples who typically have lower incomes and must be careful not to overspend.

Another approach is to design a spreadsheet that tracks all your spending and totals it up at the end of the month. You can also make use of certain debit and credit card tools that will breakdown your expenses per category. Just make sure you’re paying off your credit card charges each month. Try out a few different methods and do whatever works best for you and your spouse.

7. Have Weekly Money Meetings

These meetings are great because they strengthen the communication in our marriage as well as our level of trust. We always know where we stand financially and that we’re both doing our best to keep that on solid ground. Setting aside time to talk also helps us to stop worrying about money because we know that money matters will be dealt with.

8. Save for Retirement

Whether you’re married or not, you need to make sure you are set financially for the long haul. This means you need to save for retirement now. Putting $50 in a month will help you over the long term. Because of compounding interest, time is just as important as money when it comes to growing your retirement fund, so don’t delay.

9. Get Out of Debt and Stay Out of Debt

Debt can be damaging to any one person, but it is a double threat when you’re married because two people are responsible for paying the money back. Start your marriage out right by eradicating debt and not racking it up again. Work out a plan with your spouse on how to get out and stay out of debt.

Buying a home is the biggest purchase most Canadians will ever make, and with the high cost of real estate today, understanding the full financial commitment is critical. TD Canada Trust breaks down three key home financing decisions for first-time homebuyers to consider: down payments (20% is the goal), mortgage options (it’s not just about the lowest interest rate possible) and accelerated payments (pay down more than you need to).

“Home ownership is a major goal for many Canadians, and in today’s market it is especially important that prospective buyers understand home financing options in order to manage their overall monthly costs, assess the flexibility they will need, and help plan for the future,” said Farhaneh Haque, director of mortgage advice at TD Canada Trust.

The following tips can help first-time homebuyers structure their mortgage so that it works best for them before signing on the dotted line:

1. Down Payment: how much and how to finance?

There are many benefits to a larger down payment. For example, homebuyers with a down payment of greater than 20% do not have to obtain mortgage default insurance, the premium for which is calculated as a percentage of the mortgage and is paid up front or by adding it to the principal portion of the mortgage. So, the larger the mortgage balance, the higher the monthly mortgage payments. Eliminating or decreasing this premium can result in significant savings.

Haque suggested that first time buyers can take advantage of the government’s Home Buyers’ Plan and use savings in their RSP to bolster the down payment.

“Homebuyers can also consider withdrawing up to $25,000 from an RRSP to put towards the down payment on a first home,” said Haque. “While this can be a huge help upfront, among other conditions it must be repaid within 15 years, so make sure to factor in the repayment schedule into the monthly budget.”

A low interest rate isn’t the only factor to consider when choosing a mortgage. A mortgage specialist can help you navigate options like flexible payment features, and discuss monthly payment amounts in the context of your overall cash flow and future home-buying plans.

“Buyers choose a home because it fits their lifestyle needs,” said Haque. “A mortgage should pass the same test, and that means weighing the current term options against an overall long-term plan to pay that mortgage down. Once you find the best option for you, look for opportunities to realistically accelerate repayments.”

Fixed vs. variable interest rate

With a fixed interest rate mortgage, the interest rate and monthly payments do not change throughout the term of the mortgage and it’s clear upfront how much will be paid off at the end of the term. With a variable interest rate mortgage, the interest rate may fluctuate during the term. If interest rates go down, more of the monthly payment is applied to the principal, helping to pay off a mortgage faster. If interest rates rise, more of the monthly payment is applied toward interest. In addition, with a variable interest rate mortgage, you may be required to revise your payment arrangements at certain times.

“This choice usually comes down to whether homeowners are comfortable with the possibility of paying more money toward interest and less to principal some months as a trade-off for potential interest savings other months, or if they prefer the stability of a fixed interest rate mortgage,” said Haque.

Open vs. closed mortgage

With a closed mortgage, a homeowner agrees to a term anywhere from six months to 10 years. There are conditions that limit when a closed mortgage can be renegotiated or refinanced and there may be a prepayment charge for renegotiating early or paying off the mortgage prior to the end of the term. Often negotiated for a shorter term, an open mortgage can be paid off at any time without prepayment charges. While it offers greater flexibility in terms of repayment, the interest rate for an open mortgage may be higher than for a closed mortgage.

Flexible payment features

Some mortgages offer features that give homeowners added flexibility to react to changes in their financial situation. For instance, flexible mortgage options may allow homeowners to make prepayments on their mortgage when they can and then reduce their monthly mortgage payment or take a payment vacation for a short period of time when they need to.

“Until it’s paid off, a mortgage will become a part of a homeowner’s life. Homebuyers need to ensure the terms of their mortgage match their plans, now and for the future,” said Haque.

3. Accelerated payments: how can a mortgage get paid down faster?

Homebuyers can pay off their mortgage faster and save money on interest by choosing a shorter amortization period or setting up an accelerated weekly or biweekly payment schedule instead of a monthly payment schedule. Prepayments are another way for homebuyers to pay their mortgage faster without locking into a payment schedule that could make it a challenge to manage their monthly cash flow. Many lenders allow mortgage holders to make prepayments up to a percentage of the original mortgage amount each year.

“It’s wise for homeowners to strive to be mortgage-free quickly; however it’s important they don’t stretch themselves too thin with the amount of their payments,” said Haque. “Beyond their mortgage, there are ongoing expenses that come with homeownership such as property taxes, utility bills and maintenance. It’s important that home buyers budget for these expenses when deciding on the mortgage payment schedule they can afford. They need to be realistic and not put themselves in a position where they’re struggling to keep up with payments.”

Thinking about buying your first home? Wish you had saved up a good down payment? Maybe you have, but

didn’t know it. Designed to help first-time buyers get into home ownership, the federal Home Buyers’ Program lets you access tax-free monies for use towards the purchase or even construction of your first home.

Why tap into your RRSP? The most common reason is to boost the down payment on a home. The bigger your down payment, after all, the smaller your mortgage. And you may qualify for better interest rates too; your healthy down payment shows the lender that you are a low-risk candidate for a mortgage loan.

Here’s how it works. If you’ve been contributing to an RRSP, then you already know that the program is designed to set aside money for retirement, with the money going into the program tax-free (paying taxes on the funds when they’re withdrawn later). But there are some valid reasons why you may want to access these funds earlier. A home purchase may be one of them. As a first-time homebuyer, you are allowed to withdraw money tax-free, provided you adhere to the repayment plan. (Just make sure, of course, that your RRSP is not a locked-in plan.) You can withdraw up to $25,000 from your plan. If your spouse qualifies as a first-time homebuyer, then he or she will also be able to withdraw $25,000. Between the two of you, you could possibly have a hefty down payment sum of $50,000. That’s enough to make a substantial difference in the affordability of home ownership!

There are some conditions that you should know about. For example, you must enter into a written agreement to buy or build before you can withdraw money. And you are expected to complete the home purchase no later than October 1 of the year following your withdrawal. In addition, all HBP-eligible withdrawals must be made in the same calendar year, and you can’t have owned the home more than 30 days before the date of withdrawal. Above all, you must meet certain repayment terms. Repayment to your RSP begins the second year following the year of withdrawal. You have up to fifteen years to repay, and each annual repayment must be at least one-fifteenth of the total withdrawal, otherwise you have to include each repayment amount as income for that year.

A common question: so who exactly qualifies as a first-time homebuyer? What if one partner has owned a home before, for example? Well, it often happens that only one partner qualifies as a first-time homebuyer, so only one RRSP can be tapped for funds. But if either of you has not owned a home for the past five years, then you meet the description of a first- time homebuyer!

Any kind of home qualifies for the program – detached, semi-detached, mobile, condominium, etc. – as long as it is located within Canada and will be your principal residence within one year. A detailed booklet is available on the Canada Revenue Agency website. Look for T1036, which is the form required for requesting a withdrawal.

If you’re thinking of using your RRSP for your first home purchase, consider meshing your RRSP strategy with your down payment savings. Putting away funds in your RRSP not only saves you the current income tax, but any tax refund translates into more dollars towards your down payment. If you have RRSP contribution room, you can make your contribution now and then after 90 days you can redeem your RRSP under this plan, using your tax refund to bolster your down payment.

Let’s have a conversation about your future plans for home ownership. A good plan is always a great beginning!

Nitesh Kumar is a Mortgage Broker with Mortgage Intelligence. He can be reached via phone at 416-419-2566. FSCO lic. M08001411.

Thinking about buying your first home? Wish you had saved up a good down payment? Maybe you have, but

didn’t know it. Designed to help first-time buyers get into home ownership, the federal Home Buyers’ Program lets you access tax-free monies for use towards the purchase or even construction of your first home.

Why tap into your RRSP? The most common reason is to boost the down payment on a home. The bigger your down payment, after all, the smaller your mortgage. And you may qualify for better interest rates too; your healthy down payment shows the lender that you are a low-risk candidate for a mortgage loan.

Here’s how it works. If you’ve been contributing to an RRSP, then you already know that the program is designed to set aside money for retirement, with the money going into the program tax-free (paying taxes on the funds when they’re withdrawn later). But there are some valid reasons why you may want to access these funds earlier. A home purchase may be one of them. As a first-time homebuyer, you are allowed to withdraw money tax-free, provided you adhere to the repayment plan. (Just make sure, of course, that your RRSP is not a locked-in plan.) You can withdraw up to $25,000 from your plan. If your spouse qualifies as a first-time homebuyer, then he or she will also be able to withdraw $25,000. Between the two of you, you could possibly have a hefty down payment sum of $50,000. That’s enough to make a substantial difference in the affordability of home ownership!

There are some conditions that you should know about. For example, you must enter into a written agreement to buy or build before you can withdraw money. And you are expected to complete the home purchase no later than October 1 of the year following your withdrawal. In addition, all HBP-eligible withdrawals must be made in the same calendar year, and you can’t have owned the home more than 30 days before the date of withdrawal. Above all, you must meet certain repayment terms. Repayment to your RSP begins the second year following the year of withdrawal. You have up to fifteen years to repay, and each annual repayment must be at least one-fifteenth of the total withdrawal, otherwise you have to include each repayment amount as income for that year.

A common question: so who exactly qualifies as a first-time homebuyer? What if one partner has owned a home before, for example? Well, it often happens that only one partner qualifies as a first-time homebuyer, so only one RRSP can be tapped for funds. But if either of you has not owned a home for the past five years, then you meet the description of a first- time homebuyer!

Any kind of home qualifies for the program – detached, semi-detached, mobile, condominium, etc. – as long as it is located within Canada and will be your principal residence within one year. A detailed booklet is available on the Canada Revenue Agency website. Look for T1036, which is the form required for requesting a withdrawal.

If you’re thinking of using your RRSP for your first home purchase, consider meshing your RRSP strategy with your down payment savings. Putting away funds in your RRSP not only saves you the current income tax, but any tax refund translates into more dollars towards your down payment. If you have RRSP contribution room, you can make your contribution now and then after 90 days you can redeem your RRSP under this plan, using your tax refund to bolster your down payment.

Let’s have a conversation about your future plans for home ownership. A good plan is always a great beginning!

Nitesh Kumar is a Mortgage Broker with Mortgage Intelligence. He can be reached via phone at 416-419-2566. FSCO lic. M08001411.